nathan tankus wrote: > i think some balance of payments economics is needed here. > > china's current account surplus with the u.s= their capital account > deficit with the u.s > > if they bought yen and sold dollars their currency would rise against > the dollar immensely creating a current account deficit or forcing > them to reestablish their net holding of united states financial/real > assets.
if they bought Yen and sold dollars, the Yuan would rise relative to the dollar, so that Chinese products would become more expensive in the US hurting Chinese exports to the US (and encouraging their imports of our goods). This would go against their industrialization policy. -- Jim Devine / "In an ugly and unhappy world the richest man can purchase nothing but ugliness and unhappiness." -- George Bernard Shaw _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
